Order limits for livestock buyers under fire

Order limits for livestock buyers under fire


LIMITING livestock commission buyers to one order would put many out of business, have unintended negative consequences to competition for stock and would likely lead to the closure of smaller saleyards.


LIMITING livestock commission buyers to one order would put many out of business, have unintended negative consequences to competition for stock and would likely lead to the closure of smaller saleyards.

That’s the feedback from processors, livestock agents and buyers, and a number of producers as well, as talk of a voluntary code of practice for buyers ramps up.

The possibility of a code has arisen from claims of buyer collusion and uncompetitive practices at saleyards made through senate inquiries, an Australian Consumer and Competition Commission market study and public forums on the boom and bust nature of the cattle market.

Single buyers with multiple orders has been a major bone of contention.

Stock agents have made the point there is big confusion as to what an agent is.

There are processor buyers who work solely for a company such as Teys or JBS; commission buyers who might have orders from a restocker, a butcher, a live trade operator or a processor and stock agents who sometimes buyer for their producer clients, they said.

“This whole group of buyers is being referred to as agents - the terminology is being mixed up and that is causing a lot of angst for stock agents,” said Australian Livestock and Property Agents Association (ALPA) chief executive officer Andy Madigan.

While ALPA would be open to discussion about a code of practice, Mr Madigan pointed out auctioneers already had a level of legislation over them, whereby they were required, in most states, to be licenced.

Secondly, ALPA had a national auction terms and conditions code which binds the buyer, vendor and agent to certain behaviours, he said.

The call for a ban on multiple orders made no sense, he said.

“A buyer will typically have orders for different categories of stock, none competing against each other, so what advantage is there in restricting them?” he said.

“If they are only allowed one order, that effectively takes a number of buyers out of the market.

“The small butcher shop can’t afford time out of their business to go and buy three vealers, nor can many a restocker who has a farm to run.

“It is effectively stopping someone doing their job and we would view that as a restriction of trade.”

Elders livestock sales manager Queensland Paul Holm said if buyers with multiple non-conflicting orders were forced to drop all but one order, they would not go to the small sales.

“Some of those sales are in areas where people do not have the ability to market their cattle elsewhere,” he said.

Because buyers operated at a public auction it was no secret who they were buying for.

“You don’t pick up a commission buyer from the yellow pages,” Mr Holm said.

“You don’t give them an order which clashes with one they already have, it’s just not in your interests.

“If you are signing over thousands of dollars and you don’t know the buyer’s business, fool you.”

Mr Holm said talk of putting a cap on orders smelled of the belief producers needed to be protected “when in fact producers are very astute business people, certainly not naive, and are playing the marketplace to their advantage.”

“There is not a chance in hell they would sell where they believe collusion is happening,” he said.

Voluntary code not enough

THE producers most outspoken about unfair saleyard practices think a voluntary code doesn’t go far enough.

Loretta Carroll, Ovens Valley Branch of the Victorian Farmers Federation and Australian Meat Producers Group (AMPG) member, said it was ‘just paying lip service’ to the issues and regulation was needed.

Legislation which underpins agreed rules and expectations to prevent unfair practices and collusion that restricts competition in the saleyards, such as combined boycotts of particular sales, multiple orders with the one buyer and the splitting of yards between buyers, was the only solution that would work, she said.

AMPG says voluntary codes of practice have long been put forward as a stalling tactic by industry participants seeking to forestall legislated enforcement.

A voluntary code would require a level of trust between producers and processors that does not currently exist in Australia, AMPG argues.

Mrs Carroll said the Federal Government’s move to mandate professional standards for financial advisors could be used as a blueprint for the beef industry.

“Both the financial advising industry and the beef industry are significant contributors to the Australian economy,” she said.

“Certainly, if the financial advising industry is best served by establishing a new, independent Commonwealth company to develop and enforce a code of conduct then the beef industry would also be best served that way,” she said.


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